First Solar laying off 1,600 workers, lowers guidance

WASHINGTON (AP) — First Solar, the largest U.S. solar company, says it will lay off 1,600 employees as it expects to lose money this year, mostly due to a steep decline in demand for solar products in China.

The company also said it was phasing out production of its older solar modules and accelerating production of its new line of solar products, a transition First Solar said will cost it between $500 million and $700 million in restructuring and asset impairment charges. They will be booked this year, the company said.

First Solar executives said the Chinese government's reduction of installed solar targets for 2020, combined with competitors' steady or increased production, has saturated the market and hurt pricing. The company also said last week's election result raises uncertainty about federal programs related to long-term renewable energy development in the U.S.

The Tempe, Arizona-based company revised its 2016 earnings-per-share guidance to a loss of between $2 and $4 per share. First Solar had previously expected earnings per share of $3.75 to $3.90.

However, on an adjusted basis the company raised its range by 30 cents per share, to between $4.60 and $4.80. On that basis, analysts surveyed by FactSet expect earnings per share of $4.64, on average.

Shares in First Solar Inc. fell more than 5 percent to $31.06 in midday trading as solar companies across the industry declined, with the exception of SolarCity Corp., whose shareholders will vote this afternoon on a merger with electric carmaker Tesla Motors. Elon Musk is chairman of SolarCity and Tesla.